The Church of England yesterday sold its £1.9m shareholding in News Corporation over concerns about the governance of the $58bn media organisation.

The last time the Church made a similar move was in 2010, when it sold its £3.8m stock in mining company Vedanta, over its controversial plans to mine bauxite from sacred tribal lands in India.

The Church of England first raised concerns with the board of News Corporation in the aftermath of the phone hacking allegations that surfaced in July 2011.

It unsuccessfully tried to oust Rupert Murdoch as chair at News Corporation. And after a year of dialogue between the company and the Church’s Ethical Investment Advisory Group (EIAG), the Church of England is not satisfied that News Corporation will implement necessary corporate governance reform.

In response, the Church Commissioners – which manages investments on behalf of the Church of England - and the Church of England Pensions Board have sold their shares in News Corporation, which according to the Financial Times, are trading at their highest level since 2007, hitting £15.25 yesterday.

The Church of England already excludes investment in companies involved in military products and services, pornography, alcoholic drinks, gambling, tobacco, human embryonic cloning and high interest rate lending.

But its growing stance on investing ethically has negatively affected financial performance. Church Commissioners' most recent accounts note that excluding tobacco and alcohol from its UK equities portfolio knocked around 2 per cent off its performance value.

The Church of England has three national investment bodies: the Church Commissioners for England; the Church of England Pensions Board; and the CBF Church of England Funds. Together they hold a broad range of assets worth in excess of £8bn.

In 1994 the Church of England established the EIAG, the independent advisory group which advises the Church of England's three national investing bodies on its ethical investment policy.